Networking equipment manufacturer Cisco Systems is expected to announce Friday that it has acquired cable set-top box manufacturer Scientific-Atlanta for $7 billion, the New York Times reports. The deal would give Cisco a foothold in the burgeoning digital television industry.

According to reports, the company's management would remain intact. No details were provided as to whether Scientific-Atlanta would stay in its Lawrenceville, Ga. headquarters.

Two companies primarily control the set-top box market: Scientific-Atlanta and Motorola. In recent years, the two have begun to turn the boxes into much more than just a cable signal descrambler. Units now include high-definition capabilities, digital video recording features and interactive content.

Cisco would like to make the set-top box the center of home entertainment systems, sources say, and have it control audio devices and other components as well. The company sees a promising future in on-demand programming, and Cisco's experience in networking could give it an advantage in making this a reality.

Moreover, with a 2009 deadline for conversion to digital TV mandated by the U.S. government, thousands, if not millions, of Americans will need conversion boxes to receive the signals on their older analog TVs. The changeover will no doubt be a significant source of revenue and profit for set-top box companies during that time.

The deal is the largest acquisition in Cisco's history, and its second in the consumer space. In March 2003, the company bought consumer networking firm Linskys for $500 million.

Friday's announcement would end a month of speculation as to the future of Scientific-Atlanta. The stock has surged 26 percent on buyout rumors, and its president, James McDonald, is said to be close to retirement.

Neither Cisco nor Scientific-Atlanta would comment on the report.